Price Wedges make for easy trading opportunities as traders wait for Jobless Claims

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–  CME raised margin requirements on Gold, First time raising gold margins since Nov 15, 2010.

–  Crude Oil continues its tumble on demand concerns, even as inventories drop in the US

–  ECB seen again buying Italian and Spanish government bonds (fourth straight day)

– Switzerland’s Govt is considering creating a Gold Swiss franc coins that would have a fixed content of gold. This would require a change in the constitution. Would allow private institutions to issue an unlimited number of coins whose appearance, content and weight of gold, and definition would be under the supervision of the Govt

– Various German economists and commentators have called for Greece to temporarily exit the EU according to the New York Times. The article added that some German economists have argued that Portugal and Italy might also need to leave the EU.

– Yesterday’s release of Bank of England’s (BoE) quarterly inflation report suggested that rates would stay unchanged until 2013

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Looking at the news this morning we can see early news gets us started, and then we have a summertime trading day which means volume will taper off early once again.

We begin with 830am Jobless Claims and International trade, which will most likely get us moving ahead of the 930am US Market Open.  We’ll wait to see how the open looks and then trade through the 1030am Natural Gas Report (which is very minor).  After 1030am this morning we will be keeping an eye on the clock, assuming that after 11am est today we may see volume drop as we go into the afternoon/lunch sessions.

We do not expect a Golden Lunch today because it is the summer months, but normally we would look for it today with no major news Friday morning.

Remember that summer trading days start later and they end earlier, so look to be patient and wait for the price action to pick up after 830am, and then watch the clock after 11am for the end of the morning.

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Looking at the Charts:

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Crude Oil Futures are trading in a bull price channel this morning showing us plenty of trading opportunities.  This bull channel tells me to buy support as price falls to the lows, and to look at buying pullbacks with new higher highs.  Beware the BMT will be sloppy above us, use that as a target, but not an entry location.  The key today will be waiting patiently for price to get down to support and look to buy, and then if the support is broken we sell a retracement with the target the next level of support marked up on this 89range chart.

Gold Futures are trading with a bearish tone this morning as CME raises margins 22% and traders start taking profit at these new all-time highs.  We finally got some relief on Wednesday and were able to get into some profitable trades on Gold off the highs made yesterday.  Today we see margins changed, lower highs, and clearly a new bear channel forming as traders take profits and potentially sell this thing off end of this week.  Im looking to buy support levels as price drops as the high percentage trades this morning, however, im going to pay close attention to the market sentiment as it tests support, looking for clues on the tape that prices are going to tumble.  When prices blow through support levels we know to start selling retracements.  The long term bull channel still reminds me to buy at support and buy pullbacks with new highs, however, the tone this morning may change and we may see the sentiment make it easy to sell short once today gets going.  We will be reading tape the whole morning around support and resistance levels looking for these vital clues.

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